30 June 2011

Rhode Island joins four other states — Hawaii, Illinois, New Jersey and Delaware — that have legalized civil unions, according to the National Conference of State Legislatures. Several other states recognize domestic partnerships, while six have legalized same-sex marriage, as has the District of Columbia[.]

In terms of terminology, civil unions are marriage in all but name, and domestic partnerships are "marriage minus." But, it isn't clear yet whether all three will be the same in the eyes of the federal government, only marriage will count as marriage, or both marriage and civil unions will count as marriage in the eyes of the federal government. In theory, the federal government could even treat civil unions and/or domestic partnerships as marriages for some federal law purposes, but not others.

Still, we have reached a tipping point on gay rights in the United States.

The only other New England state without either gay marriage or civil unions is Maine (a year and a half ago Maine voters narrowly overturned the state's legislatively adopted marriage equality law, 53-47), but it apparently still has some form of domestic partnership law. New York, New Hampshire, Vermont, Massachusetts, Connecticut and District of Columbia have gay marriage. Pennsylvania and Maryland are the holdouts in the Northeast that currently lack gay marriage, civil unions or legally recognized domestic partnerships, and none of the states in the region that lack gay marriage or civil unions appears to have constitutional amendments prohibiting state legislatures from allowing gay marriage.

Rhode Island's move solidifies the Northeast block's stance that same sex couples have the same legal rights under state law as married couples, putting pressure on Maine, Pennsylvania, and Maryland, which have considered but not yet adopted such legislation (with the bills failing by narrow margins), to follow the examples set by their regional neighbors with whom they have strong ties and a history of interstate cooperation on other issues like automotive emissions and bottle recycling.

In the last tally that I saw, there were civil unions in Hawaii and domestic partnership legislation on the book in Washington State, Oregon, California and Nevada, forming a regional block of greater Pacific area states with gay friendly legislation.

California had had judicially established gay marriage until voters passed Proposition 8, but a trial court has ruled that Proposition 8 was unconstitutional, a challenge claiming that the trial court judge who ruled on the Proposition 8 case should have recused himself has been rebuffed, and the 9th Circuit Court of Appeals has essentially held that the only person who purported to appeal the trial court ruling lacked standing to appeal unless the California Supreme Court states in a legal question certified to it that the proponents of a ballot initiative always have standing to defendant constitutional challenges to that ballot initiative (which it seems unlikely to do when it rules on this issue which has been briefed and it is considering).

To make a long story short, it isn't at all beyond the realm of possibility that California will have true gay marriage (in addition to New York, which took this step earlier this year) by year end. Resisting a trend that already includes two of the nation's largest states and two whole regions of the country is not easy for its opponents, particularly without national government support with the Obama administration has denied them.

In the rest of the country, Illinois (which has civil unions) and Iowa (which has gay marriage) are an island of tolerance in an otherwise legally hostile sea, in the case of Iowa, as a result of a judicial decision that caused several Iowa Supreme Court judges who supported the ruling to lose retention elections.

The repeal date for the military's "Don't Ask, Don't Tell policy" a half-measure that kept a ban on gays in the military in force, is now set in stone by legislation.

Each legislative and court victory, shifts overall public opinion in favor of the change, because there is a natural tendency to accept the legal status quo as legitimate.

For activists in Rhode Island, winning "civil union" status rather than "marriage" status is more than a symbolic defeat, because the provision of the Defense of Marriage Act (DOMA) that pertains to federal law recognition of state law marriages is crumbling. Court rulings holding that this part of DOMA is unconstitutional are staking up; the administration has changed its litigation strategy from one of vigorous defense of the constitutionality of this part of DOMA to half-hearted enforcement of the law until there is an authoritative judicial decision to the contrary despite publicly expressed doubt concerning its constitutionality, and federal administrative reluctance to enforce penalties that deportation of a same sex spouse. There is a strong likelihood, although it is not completely certain, that the federal law part of DOMA will be judicially ruled to be void and no longer applied by the federal government before the 2012 election.

But, even if the federal part of DOMA is held unconstitutional, it isn't obvious that a couple with a civil union or state recognized domestic partnership would be entitled to the same treatment under federal law as a married couple.

Even assuming that the federal government part of DOMA meets its demise for want to support from the Obama Administration and as a result of judicial rulings to that effect, the provision of DOMA the provides that states need not give full faith and credit to a gay marriage in a sister state is not yet the subject of a serious legal challenge, and a great many states have no form of gay marriage, civil union, or domestic partnership of their own.

Interstate recognition of gay marriages, civil unions and domestic partnerships is ill defined at the moment, even among states that have them. Wyoming is a recent example of a state that does not have its own gay marriage law, but was willing to take jurisdiction over a divorce for a same sex couple married elsewhere. The court found that a ban on marrying same sex couples did not imply a ban on divorcing them.

Many constitutionally prohibit gay marriage, and almost all that don't do so in their constitutions, prohibit it by statute. But, state constitutions, unlike the federal constitution, tend to be quite easy to amend as public opinion shifts.

Isolated rulings, however, particularly in the adoption and child custody area in states like Florida, have held that discrimination against same sex couples even if they are not married, lacks a rational basis and is unconstitutional under the 14th Amendment equal protection clause.

Indeed, the law related to children, in general, and of parental rights and responsibilities of married couples vis-a-vis non-married couples has been so completely harmonized in the context of opposite sex unmarried couples, that paternal marriage status is almost irrelevant to these issues now even in states that have strongly resisted recognition of gay rights. There are some sometimes subtle differences involved in establishing paternity, but otherwise, the formal barriers to same sex couples in relation to children have been retreating for some time.

The U.S. Supreme Court's Lawrence case ended criminal prosecutions for consensual, non-commercial sexual relationship between adults in same sex couples, and this also probably provides a comparable privilege for sexual relationships of this type between all unmarried adults who are not in a position of trust with regard to each other or incestuous. Very few states continue to have civil or criminal sanctions for adultery. Meanwhile, martial exclusions for non-statutory rape have increasingly been stripped from the law books.

From a legal perspective, marriage no longer has almost any relevance to the legal regulation of parenting or sexual activity with which it was traditionally associated. At this point, legal marriage is almost exclusively an economic relationship pertinent to default private law rules concerning property, and personal care taking, mandatory private law rules concerning financial support, and is a device that helps to structure economic obligations for taxes and economic entitlements to government benefits.

For many purposes, private documents, such as domestic partnership agreements, inheritance and beneficiary designations in wills and other documents, medical decision making, and more, can establish arrangements between couples whose state law legal incidents are equivalent to those provided by marriage, and in states like Colorado that are at first glance hostile to gay marriage, these legal arrangements are increasingly easier to put in place and adopting non-discrimination laws that include sexual orientation. Many couples never put the full package in place, but many, although not all, of the practical state law legal disabilities associated with not being married can be overcome.

Colorado was just a couple of votes short of a civil unions bill in the 2011 legislative session, it has a U.S. Congressman and a number of prominent state legislators who are openly gay or lesbian, it has a U.S. Senator, Michael Bennet, who is co-sponsoring DOMA repeal, and its Governor is a supporter of gay rights who made a high profile appearance at this year's Denver Pridefest. Colorado's designated beneficiary act is just a notch short of a full domestic partnership law, Denver has a process by which couples can register as domestic partners, Colorado has included sexual orientation in almost all of its non-discrimination laws, and Colorado has made other same sex couple friendly adjustments to other aspects of its private law. If Democrats regain control of the state house in 2012, and possibly even if public opinion shifts even a small number of state legislative votes in the 2012 legislative session, Colorado will probably have civil unions by 2012 or 2013.

The solid regional blocks of legal recognition for same sex couples that are in place now and growing will make denial of full faith and credit look increasingly bigoted and will make this denial increasingly administratively cumbersome as a practical manner.

The Denver Post today cited statistics from the Census Bureau identifying more than 16,000 people who are gay or lesbian partners living together in 2010 up from a little more than 10,000 in 2000. About a quarter are in Denver, and thousands more are in the metropolitan area. It is increasingly easy for same sex couples to have a marriage or civil union somewhere, and to the extent that out of state couples are given the opportunity to marry in states that do permit same sex marriages, this will presumably provide full recognition at the federal level nationwide if the federal government portion of DOMA is held unconstitutional, even if the states where the couples reside do not themselves recognize their marriages as valid.

For example, suppose that the federal government portion of DOMA is invalidated and two men from Denver get married in New York City, and then return to Denver. They file their federal tax returns as a married couple filing jointly. Colorado law provides that state taxable income is a fixed percentage of federal taxable income. But, this state tax rule is hard to apply if Colorado does not permit couples that are treated as married filing jointly for federal tax purposes to be taxed with the same filing status at the state level.

DOMA does not appear to allow one state to invalidate an adoption of a child by a same sex couple granted in another state. Community property rights that were accrued by members of same sex couples in a state that gives their relationship formal legal status equivalent to marriage probably persist, even if the couples moves to other non-community property states, and give rise, at least, to a partition right, if not a right to a true divorce proceeding. The more that this issues become practical ones immersed in people's everyday lives, rather than exceptional issues of principle, the less controversial they will become.

29 June 2011

The United States District Court for the District of Colorado has denied class action status to a class of students suing Colorado's for profit Westwood College, who allege misrepresentations in its marketing materials. The court ruled on the basis of an arbitration clause with a class action waiver in its enrollment documents, which recent U.S. Supreme Court rulings have established is enforceable, despite the fact that absent the ruling that the judge would have found the provision to be unconscionable. The named parties were ordered to arbitrate pursuant to the agreement. The ruling was made on June 6, but apparently didn't receive much press at the time. The ruling was Bernal v. Burnett (D. Colo., June 06, 2011) 2011 WL 2182903. This class action suit was filed in August, 2010.

Another class action lawsuit brought by students in Texas against Westwood was dismissed in January, 2011 on the ground that the class representative was inadequate.

This doesn't mean that Westwood College has escaped any legal repercussions for its conduct. It settled a federal government lawsuit in May of 2009 for $7 million, in which " the government charged Westwood was not the college it said it was, and that it did not provide careers for its students. The lawsuit covers a period from 2002 to 2005[.]"

The college was placed on probation by its accrediting agency and the State of Colorado in late 2010:

The Accrediting Commission of Career Schools and Colleges put Westwood College on probation in September and issued an order of continued probation Dec. 9, state officials said. "Under the spirit of consumer protection, the Colorado Commission on Higher Education decided to put Westwood College under probation," commission spokesman Chad Marturano told 7NEWS.

"In March of 2011, the Veterans Administration disqualified three Westwood College Campuses from the GI Bill Program. The VA took this step after finding, "erroneous, deceptive, and misleading advertising and enrollment practices at these institutions."

Earlier this month, (more here) Westwood College announced that it would provide what amounts to an unemployment payment for graduates who had decent grades and are looking for work, but have not found it, up to $500 a month for six months (less for some students).

The Internet is also awash with personal rants and testimonials from former students denouncing the Westwood College. Probably no other for profit college system has a more tarnished brand.

Thus, while Westwood College has won some battles, with the end of the class action lawsuit against it in Colorado being the most recent, it remains to be seen if the institution can survive.

The RIAA paid Holmes Roberts & Owen $9,364,901 in 2008, Jenner & Block more than $7,000,000, and Cravath Swain & Moore $1.25 million, to pursue its "copyright infringement" claims, in order to recover a mere $391,000. . . . If the average settlement were $3,900, that would mean 100 settlements for the entire year. . . . it was better than the numbers for 2007, in which more than $21 million was spent on legal fees, and $3.5 million on "investigative operations" ... presumably MediaSentry. And the amount recovered was $515,929. And 2006 was similar: they spent more than $19,000,000 in legal fees and more than $3,600,000 in "investigative operations" expenses to recover $455,000.

So all in all, for a 3 year period, they spent around $64,000,000 in legal and investigative expenses to recover around $1,361,000.

Judge Pro, another U.S. District Court Judge in Nevada has entered another ruling finding that Righthaven lacks standing and that the allegedly infinged work is protected by the fair use doctrine despite the fact that the entire newspaper article was reproduced. A lack of market impact was central to the ruling as was the context of the post in a political discussion and the mostly factual nature of the article reproduced. Collectively, the multiple rulings in the Righthaven fair use cases have greatly expanded the pro-blogger interpretations of the doctrine in cases involving newspaper articles. One pundit, at least, however, thinks that the cases are particular to the situation when the alleged copyright owner is suing over infringements that took place before it owned the copyright and involve an owner who isn't in the business of publishing and hence has no marketplace injury from infringement of its copyrights. A real newspaper that owned the copyrights in question at the time that there was an infringement might obtain different fair use rulings.

Fellow Judge Navarro in the same district, allows Righthaven to survive a Rule 12 motion mostly because there has been insufficient discovery in that case regarding discovery at the pleadings stage.

Righthaven faces a counterclaim for racketeering in one of its cases.

Las Vegas Review-Journal columnist and former Publisher Sherman Frederick who has crassly described Righthaven in a way that implies it is a mafia enforcer is being sued personally in a South Carolina state court suit, that also has named the Denver Post in claims including one related to code inserted when one copies text from its site, and has requested a pre-judgment writ of attachment to freeze Righthaven's assets.

A pro se party who have settled has asked a judge to set aside the settlement and make an award against Righthaven.

In sum, according to Goldman, "Righthaven's business is in tatters.", monetary sanctions are imminent, professional conduct investigations are ongoing, they are experiencing staff turnover, they have alienated a lot of judges, and they have made their business unattractive to future and renewing clients. Goldman characterizes efforts to overturn these rulings in the 9th Circuit Court of Appeals as a "hail mary" attempt.

The web comic Misfile illustrates a point that is a powerful one in litigation and conflict resolution generally: clarity of proof can be extremely powerful.

The scene as set as two of our main characters, both high school girls (actually, it is a bit more complicated than that, but those issues aren't relevant to this post) and neither of whom has any prowess at fighting, head to the parking lot after a late night burger and fry session where they encounter two imposing men with bad intentions who make increasingly less veiled threats until their not very imposing high school friend appears and confronts the men (1, 2, 3, 4, and 5).

Our hero is clever, however, and does have a cell phone, which saves the day as illustrated below in the scene's climax:

Mangaka Chris Hazelton isn't breaking new ground in this twist. I've seen it in popular fiction half a dozen times, but it really does work in real life, and I've seen this general insight used with success in media reports of real life lawsuits, cases that I've actually worked on, and in day to day disputes that threatened to escalate over the years quite a few more times than I have in action movies and police procedurals.

While there are fine points of the law that are resolved in appellate courts, often to address instances when the facts or law are ambiguous, the law can be an extremely powerful and predictable tool when the facts are crystal clear and that law that applies to those particular facts is not ambiguous.

Video recordings and DNA evidence, for example, have led to an surge in cases where police misconduct is identified and punished, where innocent defendants who are convicted are exonerated, and where guilty individuals are identified and convicted of serious crimes. Likewise, as a general rule, the value of private investigators who can develop a clear set of facts in a case, is greatly underestimated.

Clear facts mean that presumptions that protect powerful interests don't work. Clear facts mean that the party with the facts in their favor doesn't have to compromise in settlement negotiations. Clear facts permit litigators to present a smaller number of simpler legal theories rather than hedging their bets due to factual ambiguities with multiple theories.

A great deal of the way that economic transactions are structured can be explained by a desire to create a compact set of completely unambiguous, easily proven facts should there be a need to bring suit as a result of the transaction. For example, when a purchase is financed with credit, the underlying purchase of goods or services for money is typically separated from the promise to pay a third party lender with whom the only material issues are the terms of a promissory note or credit agreement, the amount lent in documented non-cash transaction, and the payments made in documented non-cash transactions. By segregating disputes about the underlying purchase from disputes about the debt, the resulting lawsuits become simpler. Lenders also tend to lend predominantly in low dollar amount transactions that can be litigated with the expedited procedures of limited jurisdiction courts, or in transactions with collateral where the collateral can be seized in at least partial satisfaction of the debt without judicial process or with an expedited and standardized foreclosure process. Moreover, because the judicial process poses such a low barrier to enforcement of an obligation in a situation where the facts are clear, it is often not necessary to resort to that process at all to secure compliance.

Messy aspects of economic transactions can be and are litigated. Business people sometimes extend credit to their customers, linking the credit arrangment and the underlying transaction, and dissatisfied customers sometimes bring suit when the goods and services they receive are unsatisfactory. Some deals are inescapably complex, multi-party arrangements. Accidents happen in ways that are not foreseen and not well documented but serious nonetheless. But, these make up a decided minority of cases that are litigated in the civil courts.

28 June 2011

One of my favorite legal quotes is from Elihu Root, a famous Wall Street lawyer a hundred years ago or so. He said "About half of a decent lawyer's practice is telling prospective clients that they are damn fools and should stop."

Under Rule 11, eventually, after expensive litigation, a party might convince a judge to sanction a bully's lawyer for filing a frivolous lawsuit. Rule 11 awards are extremely rare, kind of like sightings of Bigfoot.

These would be landmark decisions in personal jurisdiction if they spoke with one voice, but they don't. As the lead opinion in the second case explains:

The rules and standards for determining when a State does or does not have jurisdiction over an absent party have been unclear because of decades-old questions left open in Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U. S. 102 (1987).

The first case, unanimously decided, was as much error correcting and precedent changing. Incidental sales of a few products not marketed there in the forum state, when those product that actually caused an injury to the Plaintiff were never present in the forum state, would not generally give rise to personal jurisdiction under a fair reading of existing law. The injuries involve didn't result from a products being carried in the stream of commerce to the place where the harm was caused in the case.

The second case, decided on a 6-3 basis, with two of the majority judges (Breyer and Alito) concurring in judgment, but not reasoning of Justice Kennedy's ruling on behalf of four judges, is a case that was a close one, quite plausibly providing a basis for personal jurisdiction in a U.S. state under a stream of commerce theory (although Breyer and Alito find that it does not under existing precedents because it involves a single isolated sale with no contacts in New Jersey in particular, rather than a regular stream of products), and it may constrain that theory of personal jurisdiction in personal injury cases going forward. The concurrence also argues that what makes since for a large scale manufacturer may not make sense in the case of a small craft manufacturer operating through big business distributors.

Justice Kennedy's opinion, whose rational fails to secure a majority, rejects a theory based on "fairness and foreseeability" under Ashai, and instead reverts to an earlier precedent out of which the stream of commerce standard arose that is still a touchstone for personal jurisdiction cases outside the product liability area, which holds that a court can have long arm jurisdiction over a party when it "“purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U. S. 235, 253 (1958)."

The dissent would have transferred a clear intent to market in the United States to the particular state, New Jersey, where the product happens to wind up.

The practical impact of these particular cases is material for the defendants involved. French and English forums, in addition to being inconvenient for U.S. defendants, do not award signficant damages for non-economic harms like pain and suffering, do not afford a right to trial by jury for Plaintiffs in products liability lawsuits, and arguably have less generous standards for finding liability at all on failure to warn theories.

But, since the first case was well within past precedents, and the major change in the standard for applying its personal jurisdiction precedents in the second one did not secure majority support (while the broadened standard advanced by the dissenters also failed to secure majority suport), the net effect of all of these suits is to leave the legal standard for asserting personal jurisdiction in product liability suits essentially unchanged while reaffirming that not every single product liability suit brought by a U.S. defendant against a foreign manufacturer is within the long arm jurisdiction of state courts.

One fruitful way to look at the politics of immigration, is from the perspective of a minority (or at least socio-economically subordinate), ethnically white culture in the United States that is trying to avoid dilution. This culture, which I call "Country-Western", is one that even people from this culture who make it into the ranks of the American economic elite often work hard to suppress.

Why do the people of immigrant filled New York City or Los Angeles not fear immigration, while excluding immigrants is highly salient in Alabama, where immigrant populations are scarce?

Perhaps, the answer is rooted in the inferrence that immigrants will assimilate into the dominant culture of the United States. If you are a native born member of the white middle class in New York City or Los Angeles, you can be relatively confident that immigrants are eager to assimilate into your culture. If you are a native born member of the white middle class in Alabama, you can be relatively confident that immigrants are not particularly eager to assimilate into your culture.

The drama of gay rights can been seen through the same prism. Because, "country-western" culture in the United States does not have much of a niche in which one can come out as gay, and because churches which are welcoming to people who are gay tend to have ties to the dominant rather than the "country-western" culture, acceptance of gay rights fuels a trickle of native born members of this white minority culture out of it and into the dominant American culture. It is no coincidence that states that allow gay marriage and/or civil unions are overwhelmingly Yankee or urban, and that states that take the half-step of domestic partnerships are overwhelming the Pacific States which have only a weak "country-western" cultural component, while those states where this cultural component is large tend to have state constitutional amendments prohibiting gay marriage.

This notion may even explain much of the anti-intellectualism that is rife in conservative white protestant political circles.

Thus, fear of immigration and gay rights and science may have much the same motive as the fear that Jewish parents have of intermarriage. The driving motivator may be a loss of cultural market share if immigration and gay rights are embraced. This impact, unlike the questionable economic impacts sometimes claimed in polite political debate, may help explain the persistance of these issues as high saliance issues despite an absence of tangible economic or liberty impact on people. The fear is dilution and marginalization of a white ethnic culture that is unable to absorb either.

A trickier issues is parsing what is going on in the Midwest, which is neither entirely Yankee or entirely Country-Western. Outside the highly urbanized Illinois and its neighbor Iowa, they have taken the Country-Western line on gay rights, but until recently haven't been particularly hostile to immigration. But, these states also seem to be swing states that are potentially on the brink of changing sides in the two party battle for the United States as they are depopulated or stagnant in population and the people with the strongest ties to the dominant American culture leave, while those with the strongest ties to Country-Western culture remain.

In contrast, as urban areas in the American Mountain West grow, the influence of rural areas and rural support oriented cities is declining and their political fates are increasingly aligning themselves with the compositions of the waves of migrants into their cities.

26 June 2011

Supreme Court Justice Ann Walsh Bradley late Saturday accused fellow Justice David Prosser of putting her in a chokehold during a dispute in her office earlier this month.

"The facts are that I was demanding that he get out of my office and he put his hands around my neck in anger in a chokehold," Bradley told the Journal Sentinel. . . .

A source who spoke to several justices present during the incident told the Journal Sentinel that the confrontation occurred after 5:30 p.m. June 13, the day before the high court's release of a decision upholding a bill to curtail the collective bargaining rights of public employees.

Six of the court's seven justices - Justice N. Patrick Crooks was not present - had gathered in Bradley's chambers. Some were informally discussing the decision.

The conversation grew heated, and Bradley asked Prosser to leave. Bradley was bothered by disparaging remarks Prosser had made about Chief Justice Shirley Abrahamson, a source said.

Before leaving, Prosser "put his hands around her neck in what (Bradley) described as a chokehold," the source said.

"He did not exert any pressure, but his hands were around her neck," the source said.

The source said the act "was in no way playful." . . .

Infighting has plagued the court in recent years and often spilled into the public. The court's rancor became a campaign issue for Prosser this spring, but he insisted he was not the cause of the problem. He said during debates that he was confident the internal disputes on the court would fade quickly once he was re-elected.

Prosser acknowledged in March that he called Abrahamson a "bitch" and threatened to "destroy" her during a closed-door meeting.

At the time, Prosser told the Journal Sentinel that the outburst to Abrahamson came after the chief justice took steps to undermine him politically and to embarrass him and other court conservatives.

"In the context of this, I said, 'You are a total bitch,' " Prosser said. "I probably overreacted, but I think it was entirely . . . warranted. They (Abrahamson and Bradley) are masters at deliberately goading people into perhaps incautious statements. This is bullying and abuse of very, very long standing."

In a March interview, Bradley said Prosser had flashes of extreme anger on and off over the years.

"It's been going on for years off and on," she said.

After Prosser's outburst, Bradley sent an email to him and other justices saying the behavior was unacceptable. She said this March that from the time of her email until then there had been no incidents of similar magnitude.

The Denver Post, in its continuing commitment to reducing the quality of the service it provides its customers, purged about fifteentwelve comics from its weekly offerings starting today. It had cut 22 of them on March 1, 2010. Repeating its last effort, the announcement of the cuts didn't identify the specific strips cut. The cuts appear to include:

Bizarro
BrevityDrabble
Doonesbury
Dustin
F-Minus
Frazz
Free RangeFreshly Squeezed (despite the fact that it is home grown)Funky Winkerbean
Heart of the City
The Knight Life
Non Sequitur
Overboard
Scary Gary

Any errors in this list are attributable to the Denver Post which failed to list them itself.

22 June 2011

Average and marginal income taxes for those making the median income and twice the median income are mostly at forty year lows. Taxpayers making half the median income have never paid less in income taxes (the average income tax rate is a negative percentage of income), but have the highest marginal income tax rates of all taxpayers, due to the effects of various refundable tax credits, the standard deduction and personal exemptions.

The bottom line, here, and across the board in the area of federal taxation, is that in a time period where we have federal budget deficits, it has never made less sense to close those deficits entirely or mostly through spending cuts. We have large budget deficits, at the federal level, and have almost overconstrained state budgets in Colorado that have forced painful cuts, mostly because we made deep tax cuts during an economic boom while fighting two regional wars, without paying for them.

From the perspective of overall economic growth and the employment situation, we should be spending more in the public sector, at a time when private sector demand is anemic and investment activity is tepid. Instead, we are cutting back on public services at a time when our economy has massive amounts of slack resources and above average demand for public services.

Also, our current extremely generous tax code is full of special interest tax breaks that constitutes autopilot meddling with private economic decisions that picks winners and losers in the business world, rather than letting the marketplace carry out that function, continues to be a force driving increasing systemic risk in our economy, and dramatically increases the dead weight transaction costs associated with tax code compliance and tax planning that its one of the regulatory costs of government that truly does hit small businesses the hardest.

Accumulated tax code crud is inevitable. A tax code will never be ideal once and for all. Revenue needs change, new kinds of transactions are invented, politicians are compelled to respond to urgent cries from the public for tax tweaks great and small to be responsive. But, like a garden, the tax code requires continuous weeding of provisions that damage the whole and planting of improved provisions if it is to satisfy the public need for revenue in a way that doesn't do unnecessary harm to the economy. Congress has put off that unpleasant task for too long, and the result has been ugly.

But, the solution is not to shut down the IRS, to hire private collectors, to pass further special interest tax break, to pass a consumption tax, or to mimic sometimes lower foreign corporate tax rates without expanding the tax base as countries with lower corporate tax rate do. Instead, it is to take on the unpleasant business of repealing a great many tax breaks, in a way that increases the amount of revenue produced by the income tax, makes the tax code more economically neutral, and reduces the complexity and tax planning opportunities that great dead weight drags on the economy.

21 June 2011

A new study to be released in the American Journal of Sociology by Liana Sayer of The Ohio State University looking at 3,600 couples surveyed in 1987-1988, 1992-1994, and 2001-2002 shows "how employment status influences both men's and women's decisions to end a marriage.

[A] woman's employment status has no effect on the likelihood that her husband will opt to leave the marriage. An employed woman is more likely to initiate a divorce than a woman who is not employed, but only when she reports being highly unsatisfied with the marriage. . . .

For a man, not being employed not only increases the chances that his wife will initiate divorce, but also that he will be the one who opts to leave. Even men who are relatively happy in their marriages are more likely to leave if they are not employed[.]

The finding seems to reflect data that I've cited in the past on the subject that appear to show that economics is still probably the strongest tie that holds marriages together and the biggest influence on recent trends in divorce rates, but that the dynamic is complex. In a nutshell, the key economic factor seems to be the economic dependence of women on men in a marriage. When it is present, divorce is rare. When it is absent, marriages tends to survive in good times, but not in bad ones.

I've hypothesized in previous posts that the driving factor behind the divide in divorce rates between college educated and non-college educated couples is that college educated women relative to non-college educated women (1) have more to gain economically from their husbands (who have better incomes and often benefits like favorably priced health insurance and defined benefit pension plans), (2) sacrifice more of their earning potential by being married and having kids (first, because they actually stay at home as a result, and second, because experience matters much more in professional careers than in blue collar jobs), and (3) have lower expectations that they will be able to secure a match or new job that puts them in at least as good a position as they are in when married (because they have more room to do worse and less room to improve, and because the better men tend to stay married while the less desirable ones do not, on average).

Thus, even though college educated women (at least when they have children and are married to college educated men) generally have more earning capacity than non-college educated women (at least when they have children and are married to non-college educated men), also tend to have a greater economic dependency upon their husbands.

Other data have tended to show in multiple countries that an important factor in divorce rates of couples relative to each other within countries is the ratio of a husband's income to a wife's income. Marriages in which wives have more earning power relative to their husbands are more likely to end in divorce.

A Father's Day column by Vincent Carrol in the Denver Post questioned this economic interpretation for a rise in divorce rates, noting that job prospects for men aren't that much worse than they were in the 1960s and that in absolute terms couples are strong married in hard economic times because they can pool income and reduce expenses than they are when they are not together. But, his analysis paints with too broad a brush.

The men who are most likely to get divorced, those who lack college educations, have faced four straight decades of near total economic stagnation, sharing in almost none of the economic growth of that overall prosperous era, while better educated professional men have shared in that economic growth. Meanwhile, the economic prospects of women have improved dramatically in those four decades in all social classes.

But, while much better than they were in the early 1960s (when women made up single digit percentages of most professions and often remained unmarried and childless if they chose to do so at all), the economic gains for higher level women professionals who marry and have kids have consistently shown the greatest lag behind men in the same professions. The "mommy track" career pattern, of choosing to take time off from work to raise young children and to take positions within a profession that provide a better work-family balance to a greater degree than men, as much as more blatant discrimination in compensation between men and women, accounts for a very large share of the enter gender gap in compensation today. Women who don't marry and have kids and have college educations have incomes very similar to men with college educations (even if they have married and/or had kids).

The "mommy track" gap is very top heavy. Low skilled jobs of women with no college education tend not to have very seniority and experienced based pay scales. The seniority and experience factor for women who are lawyers, and doctors and business chiefs, in contrast, as illustrated with data like the University of Michigan Law School alumni survey, can be intense.

Considering policy responses to this situation is beyond the scope of this post. Obviously, nobody is seriously proposing that we should return to the 1950s regime when women were all but barred from almost all professions by school teaching, nursing and secretarial work (and professional such as laundry work and child care that constituted outsourced forms of homemaking). Neither do we want to return to the Baby Boom era barefoot and pregnant model in which economic dependence that strengthened marriages flowed from having children early and often.

It may be that marriages that are too strong aren't even desirable. The stronger a marriage is, as a result of economic dependence, the more an economically dependent wife will tend to tolerate mistreatment in that marriage, up to and including domestic violence, a husband that engaged in incest with her children, affairs, and so on.

But, it is also the case that we either have to learn to find ways to make a reality with less stable marriages work better, or rethink the economic incentives within marriage and the way that women choose to be involved in the workforce, if we wish to improve the status quo.

Addressing issues that aren't driving the problems won't produce solutions. Even changing the standards under which marriages are entered into, or divorce is available wouldn't necessarily work. In the era well before no fault divorce, when economic trends weakened marriages arose, divorces and de facto divorces became more common and changes in the law regarding the availability of divorce, followed rather than preceded this trend. Likewise, parallel to the trend of high divorce rates in recent decades (although they have started to fall again) is the increasingly widespread trend of couples never getting married in the first place.

Thwarted in their efforts to use copyright law to legally prohibit others from referencing the content that they produce, some newspapers and news services have been attempting to reinvigorate the common law "hot news" doctrine to make their publications truly "exclusive" for a little while at least.

A ruling released yesterday in the case Barclays Capital, Inc. v. theflyonthewall.com, Inc., from the United States Court of Appeals for the Second Circuit, in which the trial court had issued an injunction protecting Wall Street analyst newsletters based upon the doctrine, dealt a serious blow to that theory.

The core holding of the case is that:

We conclude that under principles that are well established in this Circuit, the plaintiffs' claim against the defendant for "hot news" misappropriation of the plaintiff financial firms'recommendations to clients and prospective clients as to trading in corporate securities is preempted by federal copyright law.

The ruling does not hold that the "hot news" tort is unconstitutional, or even that it is always pre-empted by copyright law, although the analysis does give the First Amendment considerations weight in determining the scope of copyright pre-emption of the doctrine. But, it does dramatically narrow the class of "hot news" cases that are not pre-empted by copyright law from what the leading "hot news" precedent in the Second Circuit, National Basketball Association v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997), had been understood to provide. It distinguishes and greatly narrows NBA, rather than overruling it.

Since the NBA case is the leading precedent in any United States Court of Appeals Circuit holding that the "hot news" doctrine is neither unconstitutional nor fully pre-empted by federal copyright law, the ruling deals a serious blow to the litigation strategy of traditional media outlets seeking to use the doctrine to restrain online news reporting that used traditional media sources.

Some central stated motives for the broader reading of pre-emption doctrines were both (1) the lack of protection afforded the underlying facts that suing media outlets reported, which were historical facts or financial market data, and (2) the concern that media outlets that are targets of "hot news" suits are often Internet based media ventures with sources in many states who would be unfairly subject to state law versions of the common law doctrine that differed materially from state to state, undermining the policy of uniformity that the federal copyright laws were intended to establish.

The blow this ruling presents to litigation strategies designed to give one media outlet exclusive intellectual property rights to a story is particularly great given the surprisingly blog friendly rulings that courts gave to websites republishing substantial parts of newspaper stories on the web under the copyright law's fair use doctrine, sometimes finding that it applied even in verbatim reprints of medium sized news stories or entire news photographs when other favorable conditions (like the limited negative impact a republisher was likely to have on the market for the original work).

20 June 2011

Today, a conservative majority of the U.S. Supreme Court in a 5-4 decision, held that a sex discrimination case against Wal-Mart on behalf of its 1.5 million female employees could not be certified as a class action lawsuit. (There was wide agreement that the backpay due in the case could not be handled on a class basis, but there was deep dispute over whether the existence of gender discrimination at the company could be litigated in that manner.)

This is the latest of a string of cases that have disfavored class actions, such another this term that held that the right to conduct a class action arbitration could not be implied from a simple arbitration clause and that the fact that an arbitration clause expressly prohibits class actions could never be sufficient to render it unconscionable under a provision of the federal arbitration act that allows arbitration clauses to be invalidated if they would be unconscionable under state law. The rulings have largely been statutory or based on court rules, thus they are more easily overriden than rulings based on constitutional grounds, but the rulings are colored by a deep distrust of the class action generally.

Concerns about class actions have also been a central to the tort reform movement, and have been an area where the movement has achieved more than one significant victory, by imposing major procedural limitations on securities law class actions, and by giving the federal courts jurisdiction over many class actions arising under state law that would not qualify for diversity jurisdiction. Today's ruling, interpreting the class action rule in the federal rules of civil procedure, thus, has wider implications for class actions generally, than it would have a couple of decades ago, because more kinds of class action lawsuits are confined to the federal courts.

To some extent, the distate of big businesses for class actions, and plaintiff friendly group's support for them is simply a matter of mathematics. In a situation where there are many people with small claims against a single business or small group of businesses, large numbers of people with claims will never choose to bring valid lawsuits because the litigation cost economics don't make sense, and except in the very clearest cases, the verdicts will be a mixed bag. In contrast, a win in a class action will afford a remedy to everyone with a claim (or a proxy for them) and a win on behalf of all claimants is possible even when a win on the liability issue isn't a sure thing in any given isolated case.

There is also considerable controversy over the fact that "coupon settlements" and contributions to non-profit caues often replace money awards as typical class action remedies, that class actions are expensive to litigate and rarely result in a resolution on the merits by a judge, that there are often multiple competing class actions that must be consolidated arising from single incidents, that forum shopping can be especially problematic in these cases, and that the cases can seem to be attorney driven rather than focused on providing a remedy for a client. The high cost and long litigation times involve in class action litigation don't speak well for a process which was invented to reduce litigation costs and handle numerous related small claims more efficiently than traditional litigation efforts.

On the other hand, class actions can put pressure on big businesses to comply with the law even when the state regulators of an industry are asleep at the switch, underfunded, run by a political appointee hostile to the agency's purpose, or are the victim of capture by the regulated industry. Class actions can close the gap between the laws on the books regulating an industry or practice, and the law as actually enforced. It can function as a remedy to corrupt administration of regulatory laws. Class actions are also an arguable preferrable way to regulate industries through decisions by private individuals rather than actions by state officials whom many people who are inclined towards libertarian political ideologies may distrust.

In employment cases, the key attraction of a class action is the question of proof. It may be much easier to establish discrimination on a statistical basis than it is to prove that it was present in an individual case, and it may be easier to fashion an affirmative action remedy in response to statistically proven discrimination than it is to wade through the details of a money damage remedy on a case by case basis.

But, class action cases can appear to grant legislative or regulatory type authority to courts whose procedures are primarily geared towards resolving disputes that involve only narrow disputes between small numbers of people. This tendency is particularly apparent in false advertising claims where very large numbers of people are exposed to advertising claims and considerably numbers of people may buy products that are falsely advertised, but the individualized consumer harm may be modest. Negotiations between alleged wrongdoers and alleged victim's representatives may also lead to court sanctioned remedies, such as certain forms of affirmative action, that could never be approved as legislation in the absence of a violation of the law that is never provided on the merits in court.

The trend seems contrary to the trends in our economy, in which big corporations whose mistakes routinely impact large numbers of people in incidents with a common source, rather than isolated incidents of wrongdoing, are increasingly the norm. If a big money center bank calculated interest rates on loans, or forecloses on houses improperly, it will usually be because some system has gone wrong or some computer program had an incorrect rule, with the error affecting hundreds of thousands of people nationwide, rather than because there was some isolated defect in one customer's particular case. Serious misrepresentations to consumers in commerce not infrequently involve massive advertising campaigns rather than an isolated vendor and purchasers in an open air marketplace. Serious discrimination in employment practices frequently flows from bad leadership at the top of an organization that guides subordinate managers, rather than individualized misconduct by low level managers. In our modern era of quality control systems in manufacturing, systemic defeats in mass manufactured products are more likely to cause harm than isolated duds that aren't successfully removed from the assembly line: most defective products are the result of a design defect, either in the product itself or the manufacturing process. An inability to remedy systemic wrongdoing by a big business in a collective way is out of step with an economic reality in which a large share of all wrongdoing has a systemic source. In the long run, it may be more important to the functioning of our economic to solve systemic problems than to remedy the one off screw ups that can never be completely eliminated.

For what it is worth, big government agencies, like the I.R.S., have many of the same weaknesses in offering remedies to systemic errors that put individuals in low stakes cases in bind, that big businesses do.

Some problems in the way that big businesses and big government operate, may be flaws in how they do justice between third parties who deal with them, rather than actually benefitting these entities themselves. For example, most securities fraud involves cases where a misrepresentation by a business causes a stock price to fail to reflect the truth for some period of time, which benefits some secondary market stockholders to the deteriment of other secondary market stockholders, while having little or no direct economic impact on the company itself and where only a tiny part of the benefit or harm accrues to company insiders. Often the beneficiaries and victims of the misrepresentation have no knowledge that they are acting in the basis of a misrepresentation until after the harm has been done.

Yet, if misrepresentations with immense economic consequences for stock traders routinely lead to no repurcussions for the parties who make them, the soundness of our financial system is seriously undermined. Some of the parties most responsible in fact for the financial crisis, the major credit rating companies, had very little other than their pitiful compared to the amount at stake in the economy fees, in their decisions, and will bear no consequences for their mistakes, and there is a movement in the securities law world to treat accountants the same way. Yet, if the people whose observations drive the market have little stake in being accurate, the financial markets are certain to repeat its world economy shaking mistakes. Millions of people are out of work and have been for many, many months, in substantial part because the tiny number of people on Wall Street who determined how creditworthy bond issuers were had an insufficiently compelling incentive to get their decisions right.

Part of the barrier to the problem is that power dynamics and self-interest driven policy stances are often so transparent in the tort reform area and in the area of class action litigation in particular, that it is hard to separate and address sincere and legitimate concerns from merely self-serving ones in the policy arena. Also complicating the effort to find a fair way to deal with the cases that drive class action litigation is that extremely loose class action standards and substantive law claims that can be brought as class actions in a handful of states like California create extremes of the process that suggest solutions that aren't necessarily appropriate for the more strictly regulated federal courts or courts in states like Colorado where class action litigation isn't nearly so common.

The U.S. Supreme Court held today that there is sometimes a right to counsel in civil contempt case, typically brought to secure compliance with child support orders by imprisoning self-employed people or people who have access to assets beyond the reach of the court's jurisdiction (such as funds in an asset protection trust) by incarcerating them until they comply. Civil contempt remedies are available in a wide variety of civil cases, but is rarely permitted in ordinary debt collection cases and in other cases (typically involving alleged violations of court injunctions), the parties typically are not indigent and have or have access to legal counsel.

Typically, in these cases, the critical issue is whether there is an ability to comply with the court order. Incarceration for non-payment when there is a mere inability to pay (a remedy once called "body execution") is an unconstitutional debtor's prison remedy.

The existence of the child support judgment and the fact that it has not been paid is typically self-evident from the record. But, the existence of income not succeptible to garnishment, or of assets that cannot simply be levied upon with a writ of execution is often hotly contested. The fact that a mistake on this point renders the incarceration not just inaccurate but unconstitutional makes the stakes particularly important.

I've handled both sides of such disputes for clients myself, and while the black letter law of contempt proceedings is fairly clear, judges and the sheriffs who manage the incarcerations are often confused by them because they are outside the ordinary criminal procedure mold that governs the vast majority of incarceration cases. The contempt of court remedy is often a critical safeguard in securing compliance from the most evasive and dishonest child support debtors, but is sometimes applied inappropriately to punish people who truly are simply unable to pay, rather than merely unwilling to pay. For whatever reason, child support debtors are among the most common to refuse to personally acknowledge and concede that they owe a debt even after court rulings to the contrary, so these cases are among the most contentious forms of debt collection actions.

The high court found that while incarceration of people for civil contempt can be allowed in some court systems where there is pro se party friendly environment that calls attention to the critical issues at the hearing and provides a simple form driven way for the unrepresented person to participate in the process, that such incarceration is unconstitutional without a right to counsel provided at state expense when the court system is no friendly to pro se parties or is too complex for an unrepresented person to handle.

Thus, while the South Carolina civil contempt process at issue in the case before the U.S. Supreme Court failed the test, it is entirely possible that the due process protections for the same kind of proceeding in Colorado might meet the high court's due process standards.

The 5-4 ruling is a departure from most past rulings of the U.S. Supreme Court on procedural due process requirements, which have typically imposed a clear bright line rule in a class of cases, rather than setting forth a more generalized standard to apply on a court system by court system, or even case by case basis. The conservative dissenters would have found that there was no right to counsel in these cases.

Since state governments, almost to a one, are currently in a very tight fiscal situation and would be hard pressed to pay for court appointed counsel in these cases, the likely response to the ruling will be for state court systems to develop pro se party friendly court procedures for run of the mill child support contempt of court cases.

I like flowers, a lot. I'm not very knowledgeable about them, but ever since I spent about four months living with a florist as an exchange student in high school, I've been hooked. Every time I drive to work, or take the kids to soccer, or drive to the grocery store this time of year, I can't help but to ooh and ahh at the summer flowers that have come into their seasons peak, now that the bulbs and annuals of earlier in the spring have receded into the background a little. In particular, I am awestruck by the amazing rose bushes that dot the landscape of Denver's urban residential neighborhoods.

Indeed, roses are one of the few truly unifying themes of Denver's flora. The presence or absence of trees in a neighborhood turns out to be as accurate a measure of a neighborhood's prosperity in this city as payday loan shop frequency. New developments sport fancy, water efficient grasses and wildflowers as part of xeriscaping efforts. Institutional office building owners tend to have a thing for geraniums and mums. But, roses are ubiquitous, from West to East, North to South, almost all of Denver's neighborhoods have them, dotted irregularly in select houses placed prominent in front of houses, on boundary lines and climbing up back fences. Pink ones, red once, orange ones and yellow ones. Compact bushes and sprawling abundant vines. The rose bushes at the Byers-Evans house next to the Denver Art Museum are more than a century old.

Rose are to flowers what jazz is to music. Growing them isn't necessarily trendy, just as jazz isn't necessarily cutting edge, but it has appeal with every ethnicity and with people from 11 to 101. They are enjoyed by conservatives and liberals, but modernists and traditionalists, and just about anyone else.

The trouble is that in addition to not being very knowledgeable about them, I also don't have much of a green thumb. More often than not, my gardening efforts are epic fails, despite the encouragement and help I receive from my more talented neighbors.

My dear wife is a better gardener than I am, but has different preferences. Practical woman that she is, she prefers herbs and vegetables to flowers. Flowers just aren't her thing and she isn't inclined to devote much effort to my frivolous decorations.

So, once or twice every year, I am the one who makes an effort to plant some flowers with varying degrees of success. Some years it is pansies and marigolds. On two previous occasions it has been rose bushes which promptly died. Every once and a while I have a little success that keeps me going. Last fall, I planted bulbs and all but one of them actually bloomed this spring.

This year we'd been preoccupied earlier in this spring. Our lawn was eventually fertilized and mowed a few weeks behind schedule. Our vegetables and herbs had finally gone in the week before. And, this year, for father's day, I figured that instead of going on a hike in the mountains, or watching a movie with the kids, we'd plant rose bushes. Planting rose bushes that might still be their when they have kids of their own would certainly be more memorable and would also be a better quality way to spent time with them.

So, we spent the morning traipsing across town to find our treasures. But, my daughter, ever the prophet of doom, having not forgotten the debacle of last year's effort in which our dainty new collection of freshly planted flowers was destroyed by the first bad hail storm of the year informed me:

"Dad, it's going to hail and tear all the petals off your roses. It's karma."

The weather, while clouded, wasn't that foreboding in the morning, I'm not that superstitious, and I was more worried about whether our BBQ plans would be rained out than a hail storm. So, I ignored her dire warning, and by early afternoon our two beautiful rose bushes were nicely settled in the garden plot in front of the front picture window in our living room.

Needless to say, four hours later, the hail came down with a vengeance in raisin to almost acorn sized lumps for a good half an hour or so, followed by about twenty-eight hours of rain (notwithstanding the protestations of our newspaper of record which claims that there was no measurable precipitation on Sunday).

The rose bushes survived, badly battered, and perhaps the rain will allow them to recover and last in the long run. But, given the circumstances, maybe I'm wrong about who in our household is the real "Wash Park Prophet."

17 June 2011

In a post yesterday, Technology and Marketing Law professor Eric Goldman summarizes a judge's June 14, 2011 order dealing a major defeat to Righthaven, a Internet copyright violation litigation company with the parent companies of the Denver Post and Las Vegas Review-Journal as major clients that has employed a very aggressive litigation strategy against bloggers who quote newspaper reports in their posts.

An ongoing dispute over a cease and desist letter sent by Righthaven on behalf of the owner of the Denver Post to Colorado Pols, asserting rights in excess of those legally available to the newspapers under copyright law and largely complied with by the Colorado Pols blog to the detriment of the newspapers has earned Righthaven infamy in Colorado's political blogosphere.

The judge found that Righthaven didn't own the copyrights it claimed to be suing under its contract with the media company, and according to Goldman that judge ruled "that Righthaven can't fix the existing contract defect for the existing litigation because standing is measured when the complaint is filed. This could lead to dismissal of all pending Review-Journal litigation and, depending on the exact wording of the MediaNews contract, possibly the Denver Post litigation as well."

The ruling is a blow to Righthaven's entire business model:

"If Righthaven can't get this opinion reversed on appeal and other judges defer to this opinion on the standing question (which I think it likely), Righthaven may be back at square one with its entire business. Thus, I assume Righthaven will appeal this decision. However, this is a pretty well-constructed opinion, so Righthaven will have an uphill battle overturning it on appeal."

The judge also severely criticized Righthaven's litigation conduct and is likely to impose sanctions:

* the judge rejects Righthaven's basic substantive argument as "flagrantly false—to the point that the claim is disingenuous, if not outright deceitful."
* . . . "the Court believes that Righthaven has made multiple inaccurate and likely dishonest statements to the Court."
* the judge then goes on to lambaste Righthaven for not identifying [Las Vegas Review-Journal Owner] Stephens Media as an interested party in the lawsuit, calling that omission "brazen" and "egregious."

[As the order explains: "not only did Righthaven fail to identify Stephens Media as an interested party in this suit, the Court believes that Righthaven failed to disclose Stephens Media as an interested party in any of its approximately 200 cases filed in this District. Accordingly, the Court orders Righthaven to show cause, in writing, no later than two (2) weeks from the date of this order, why it should not be sanctioned for this flagrant misrepresentation to the Court."]

The judge requires Righthaven to explain why the judge should not order sanctions. Given the tenor of this opinion, it seems like a sanctions order is inevitable. The opinion also hints that Democratic Underground may get its attorneys' fees. All told, this case is probably going to cost Righthaven dearly. And after a ruling like this, Righthaven's entire enterprise is on the ropes.

Since standing goes to the subject-matter jurisdiction of the federal courts in which Righthaven has already obtained judgments and settlements resulting from federal court litigation, it is not impossible that litigation to set aside those ruling and even to obtain restitution of the settlements paid based on litigation premised on misrepresentations to the Courts by Righthaven could be brought successfully if this judge's order survives attempts to set it aside on appeal.

The Electronic Frontier Foundation, which provided a legal defense to the Democratic Underground also noted that:

"The Court permitted Democratic Underground's counterclaim to continue against Stephens Media -- the publisher of the Review Journal -- allowing Democratic Underground to show that it did nothing wrong in allowing a user to post a five-sentence excerpt of a 50-sentence article."

16 June 2011

One of the foundational ideas of criminal justice is that the threat of incarceration discourages crime because it is worse to be in prison than to not be in prison. For most Americans, this is an accurate statement. For many young black men in the United States, this is a closer call.

Using data from the U.S. Bureau of Justice Statistics and Census Bureau, I estimate death rates of working-age prisoners and nonprisoners by sex and race. Incarceration was more detrimental to females in comparison to their male counterparts in the period covered by this study. White male prisoners had higher death rates than white males who were not in prison. Black male prisoners, however, consistently exhibited lower death rates than black male nonprisoners did. Additionally, the findings indicate that while the relative difference in mortality levels of white and black males was quite high outside of prison, it essentially disappeared in prison. Notably, removing deaths caused by firearms and motor vehicles in the nonprison population accounted for some of the mortality differential between black prisoners and nonprisoners. The death rates of the other groups analyzed suggest that prison is an unhealthy environment; yet, prison appears to be a healthier place than the typical environment of the nonincarcerated black male population. These findings suggest that firearms and motor vehicle accidents do not sufficiently explain the higher death rates of black males, and they indicate that a lack of basic healthcare may be implicated in the death rates of black males not incarcerated.

13 June 2011

The law school class of 2010 . . . set a new record--only 68.4 percent of them are in jobs that require them to pass the bar exam, the lowest share since the Association for Legal Professionals began collecting data.

Another 10.7 percent of the class of 2010 are in jobs that require or prefer a J.D., while 8.6 percent have jobs that require neither a law degree nor bar passage. The class' overall employment rate--for jobs in and out of the legal profession--is lower than it's been for any class since 1996, at 87.6 percent. So counting unemployed new graduates, the actual percentage of those in jobs that require bar passage is even lower, at 60 percent.

In not unrelated news, leading Denver law firm Isaacson Rosenbaum, which until recently had 40 attorneys, and has 23 shareholders and 5 associates at the time of the announcement (and includes the author of the Colorado Appeals Blog), will disband at the end of the month after more than fifty years in business. The financial crisis slump did in this real estate deal heavy firm. Many of the remaining attorneys are landing positions with other firms around town, however.

Colorado had somewhere from 12 to 16 state court securities law class action lawsuits in the fifteen period from 1996 to 2010, six in the first five years, zero to four in the next five years, and six in the last five years. State securities law class action suits most often arise in states with many publicly held corporations headquartered there (Delaware, California, New York, and Texas) and most frequently involve merger and acquisition deal disputes. The highest number of suits was in 2009, with four, but other years had just zero or one or two filings.

SSRN has a new paper entitled "Planning For Same Sex Couples in 2011" that provides a nice overview of the estate planning and tax issues involved, including a state by state survey that covers recent legislative changes in this area.

Janus, a Denver based mutual fund group with its headquarters across the street from the Cherry Creek Mall won a major victory in the U.S. Supreme Court today. In the group, different mutual funds are organized as separate legal entities owned by their investors, and each fund has a management and control arrangement with the master entity. The ruling was a 5-4 decision for Janus along the usual conservative-liberal lines with the conservatives prevailing.

One of the funds made a statement in a prospectus that gave rise to securities fraud liability. The issue was whether the master entity could be held legally liable for the statement made only in the name of the individual fund because it provided management services and had effective control of the entity. Continuing a trend of the U.S. Supreme Court to limit secondary liability for securities fraud (e.g. disallowing aiding and abetting liability in private securities litigation), the court ruled that only the fund was legally responsible for the mistatement made in its prospectus about its fund. As a result, the damage is confined to a single entity and since there is substantial identity between the people hurt by the misstatement and the owners of the fund, the amount of financial gain available to the people bringing the suit may be modest.

The fund might have legal recourse against the master company for a breach of duty in the management of the fund that caused the misstatement to be made and caused the fund to incur liability, but given the pervasive control of that relationship by the master company, it is unlikely that such a suit will be brought in the absence of a derviative action (i.e. a suit against a third party in the name of the company brought by the owners of the company because the company itself refuses to act) by the fund owners, and such actions rarely prevail. The U.S. Supreme Court ruling, however, means that in this and many similar arrangements, the master company will have no liability for statements made in the name of a mere fund in a prospectus.

Essentially, the U.S. Supreme Court held that involvement in ghost writing a document does not suffice to pierce the corporate veil for private securities fraud lawsuit purposes.

10 June 2011

Wife's land subject to judgment. When any woman against whom liability exists marries and has or acquires lands, judgment on such liability may be rendered against her and her husband jointly, to be levied on such lands only.

- Section 14-2-205, Colorado Revised Statutes.

The statute above, part of the Married Women's Property Act passed very early on in Colorado's history (actually a few years before its admission to statehood when it was under the territorial legislature rather than the state legislature), remains on the books exactly as it read when it was enacted in the late 1800s as part of a general package of legislation that reformed the common law rule that a married woman was subsumed as one person with her husband who was vested with all of her property, upon marrying and ceased to have an of the legal rights of an adult person. Most of the sections of the act had that effect.

But, this section, by its terms (despite the fact that the heading for the section doesn't give a clue that this is the case), this section would suggest that if a woman had an unpaid debt from before the marriage, married, and then, for example, acquired a home which she and her husband co-owned, that both the half of the home owned by her, and the half of the home owned by him would be subject to liquidation for payment of the debt, despite the fact that it was her sole pre-marital debt that he wouldn't otherwise have any personal liability upon, and that the reverse (in the case of a man with premarital debts) would not be true. This gives creditors access to more assets than they would otherwise have available to them from which to collect debts of recently married women.

While some debts contracted for "necessities" by a married person in a single spouse's name may be the responsibility of the other spouse, and a spouse may be responsible for the other spouse's automobile accident liability under the "family car doctrine," the general rule is that a spouse is never legally responsible for the other spouse's sole debts and that one spouse's interest in land cannot be seized for the other spouse's debts in the absence of a fraudulent transfer.

The statute surely violates the intermediate scrutiny test for gender distinctions under the 14th Amendment's equal protection clause, but normally the remedy would be simply to say that wives who co-own real estate with their husbands have responsibility for their husbands' pre-marital debts just as husbands do for their wives under this statute.

This is the standard way that statutes that use masculine language only are interpreted and the reverse ought to be true, even though this is a case where the original intent of the statute (enacted when the 14th Amendment didn't apply, interestingly) was probably not to do so, because it was enacted in response to previously unequal treatment of the pre-marital debts of husbands and wives.

The law in Colorado's case, however, probably due to wholesale copying from the laws of some other state, corrected a problem that Colorado didn't have. Unlike some states in the Eastern United States, Colorado has never had the doctrine of tenancies by the entireties that prohibited judgment liens against a single spouse from attaching to a single spouse's interest in real property co-owned by a husband and wife. So, a husband and wife purchasing real property as co-owners does not impair the ability of a wife's pre-marital creditors to collect from her as it would, for example, in Boston where the tenancies by the entireties doctrines survives.

But, there is no obvious constitutional principle that would prohibit the law from making all of real estate jointly owned by spouses subject to the pre-marital claims of one of the spouses, and the general rule is that statutes are given effect according to their plain language. In order to escape the claim of a creditor that this expands their collection rights, a debtor husband would have to argue that the law doesn't really mean what it seems to say on its face, given the larger intent of the Married Women's Property Acts to simply treat married women the same way that unmarried women are treated in private law. This argument could be made, and its disuse suggests that there are widespread assumptions that creditors don't have this right, but such an argument would hardly be a slam dunk. Moreover, most individual consumer debt collection defendants (and some of the lawyers who represent them) aren't legally sophisticated enough to make that kind of argument.

Interestingly, there is not a single reported case that has ever discussed this statute in the entire history of Colorado, despite the fact that this would be a rule that would seem to favor creditors in debt-collection actions that could benefit that class of creditors thousands of times per year. The leading treatise on debt collection law in Colorado, by Stephen W. Siefert, "Colorado Creditors' Remedies - Debtors' Relief," doesn't ever mention the statute once. Neither does the treatise, "Colorado Family Law and Practice," by Frank L. McGuane, Jr. and Kathleen A. Hogan. While this could simply be a function of the law being unambiguous, the more likely reality is that it is forgotten and not utilized because it doesn't make logical sense in the context of the contemporary was that we think about the property rights of married people. Most lawyers don't expect it to be there and therefore don't look for it, and don't expect it to work, in the rare cases where they do know about it and it does apply by its terms to a case.

09 June 2011

[Sarah] Palin, the party's vice presidential nominee in 2008, had the support of 22 percent of the Republicans surveyed. The former governor of Alaska has not said whether she will run for president next year.

Romney, who failed in a 2008 presidential bid, had 20 percent support.

Representative Ron Paul, a libertarian Republican from Texas, and former pizza executive Herman Cain were tied for third with 7 percent each. . . .

In the Reuters/Ipsos poll, the other Republican contenders fared even worse than Romney's 13-point gap in a match-up with Obama. Palin trailed Obama by 23 points and former Minnesota Governor Tim Pawlenty was behind by 19 points. . . . The poll, conducted Friday through Monday, surveyed 1,132 adults nationwide by telephone, including 948 registered voters. The margin of error is 3 percentage points.

The story also notes that: "Other surveys have shown Romney in a stronger position. A Washington Post-ABC News poll earlier this week gave Romney a slight lead over Obama among registered voters."

The fact that two polls in the same week have a 14 point plus gap in an identical Obama-Romney matchup each among registered voters suggests that one or both of the polls have far less accuracy than their sample size based margins of error would suggest. An average of the margins in the polls, which would give Obama an approximately six point lead over Romney in a head to head matchup with this, the most competitive of the possible Republican Presidential nominees, is probably a more realistic state of the 2012 Presidental race right now.

Historical reviews of the GOP field by pundits in recent months have noted that lack of a strong front runner this early in the 2012 field compared to other post-war Presidential primaries.

08 June 2011

It takes a really poorly run bank to first foreclose on a property that has on that has no mortgage, and then to ignore a judgment entered against it from the same lawsuit until the sheriff's deputies are on its door. Alas, this is one of the half dozen largest banks in the United States, and probably the world.

Bank of America mistakenly filed a foreclosure claim against [Warren and Maureen Nyerges] even though they had no mortgage at all. The couple fought the case in court and won, but then asked Bank of America to pay for $2,534 in attorney fees. A Collier County judge ruled the bank should pay, but the bank never did.

On Friday, the couple's lawyer went to a Bank of America branch with two sheriff's deputies. He was prepared to take possession of furniture inside the bank to pay the debt.

One hour later, the bank wrote a check for $5,772.88 to satisfy the original debt plus other fees.

I've talked in the past about splitting up this blog into two parts, each with more focused coverage. I started this on a beta-test basis in May. Now, a few weeks before the 6th anniversary of Wash Park Prophet, I'm making this post to publicly announce the split. My intent is that my combined output in both blogs be a bit lighter than my recent posting pace at Wash Park Prophet.

The new blog is called "Dispatches From Turtle Island," a play on one of the pre-Columbian Native American names for America, and takers a longer term view not simply focused on Denver. It focuses on issues that transcend law and politics.

I'll also be adding a link to this sister blog in the sidebar soon. For logistical convenience, I decided to keep it on the same blogging platform as Wash Park Prophet.

Somebody forgot that in engineering, function should always trump form, particularly functional aspects that matter to your key constituents. The snafu in a $105 million court house in Columbus, Ohio was clear when it opened on Monday.

The central stairs of the new Franklin County Common Pleas Courthouse seem almost to float up from the ground floor, suspended in a foyer of light and glass.

However, the aesthetic appeal of the stairway has an unfortunate side-effect in a building where judges sentence sex offenders: People can see up a woman's skirt from the busy walkway under the stairs.

"If you wear dresses, you're on notice that you might want to take the elevator, as I will be doing," said Judge Julie M. Lynch, who wears dresses exclusively to work.

Although it's probably best not to advertise the issue for fear of abuse, people partial to skirts, dresses and kilts have a right to know about the risk, Lynch said.

From here (the Court of Common Pleas in Franklin County is the court of general jurisdiction handling felonies and large claim civil cases in Columbus, Ohio).

The problem is particularly unimpressive because the issue is a familiar one in new public building projects. I'd be willing to guess that there weren't any women or acrophobics on this engineering design team.

The county is aware of the issue and has discussed whether anything needs to be done, said Jim Goodenow, director of public facilities management.

For now, security guards have been told to keep an eye out for people craning their necks. If the design becomes a problem, the county can adjust the glass to make it less transparent, but officials are hoping not to disrupt the artistic integrity of the building. . . .

When glass stairs and walkways first came out, [one of the engineering executives who builds them for Apple computer properties] Zorn said, he remembers looking up at an elevated walkway at an airport and wondering how the designers had missed the fact that skirts were going to be a problem. Most engineers know enough to use some well-placed opaque glass and careful design to avoid the problem, he said.

A similar design for a recent renovation at nearby Ohio State University's main library was nixed at the design stage for this reason and because of "the fear some people have of standing on clear glass."

As a result of the Denver's municipal runoff election, Denver's new mayor is Michael Hancock, in a landslide, and its new clerk and recorder is Debra Johnson, by a nose. In both races, the winner of the runoff was the second place finisher in the first round.

Hancock brings a neighborhood oriented investment agenda and a commitment to ending abuses by the City's police force that have cost the city millions in settlements. He inherits a tight city budget and decades of wise municipal leadership that left Denver less hard hit in the financial crisis than many of its peers.

His personal biography is one of a man who has risen from humble circumstances as a black man in a poor Denver neighborhood from a family whose other members have not always stuck to the straight and narrow who has risen to lead his city, more or less the opposite of the life story of Chris Romer, his runoff opponent. He is also the second black Mayor of a mostly white and Hispanic city that had a KKK supported Mayor in the 1920s (Mayor Stapleton). Mayor Wellington Webb, Denver's first black Mayor, was a critical advisor in his campaign.

Most recently Hancock has served as the President of Denver's City Council, and endorsement from city council members who withdrew from the race or failed to make it to the second round of the election were key to his runoff round victory.

Voter turnout in the second round was about five thousand more (about 40% of ballots mailed were returned and considered valid) than in the first round, but runoff voters tended to return their ballots sooner than the first round voters who had more decisions to make and more candidates to choose from than in the runoff.

While the demise of the Rocky Mountain News wiped out most of the competition with the Denver Post, Denver still had one competing daily paper - the free Denver Daily News, which had been in business for a decade. But, the rising cost of newsprint put it out of business, truly leaving Denver with only a single daily newspaper in print. There is little doubt that this is not good news for Denver.

It also doesn't help that the strongest television news outlet in the market, 9 News, has a partnership with the Denver Post, and the publisher of the Denver Post also owns many of Colorado's other leading daily papers. Since the Rocky's demise, the Denver Post has had no pressure to keep its subscription prices low and the product itself has gotten thinner and thinner. The lack of competition also makes the potential for suppression of stories from big ticket media must greater.

Yes, there are still a number of Denver based weekly and monthly periodicals in the market (although one of those just went under recently as well), at least a few of which do original reporting of "hard" news, and yes, there are a number of Denver based internet and television media sources, although only a handful provide much in the way of original news reporting. Colorado Public Radio has emerged as the most robust source of original daily local news reporting that is independent of the Denver Post.